Wells Fargo beats on revenues, misses on earnings in Q3

Banking giant Wells Fargo (NYSE: WFC) on Tuesday reported revenues of $22 billion for the third quarter of 2019, which exceed the street consensus of $21.2 billion.

Meanwhile, Q3 earnings of 92 cents per share missed the average analysts’ estimate of $1.14 per share. The bank pointed out that the EPS for the quarter included discrete litigation accrual of 35 cents and a gain of 20 cents from the sale of its Institutional Retirement and Trust unit.

Without these two one-time items, Q3 EPS would still have missed the estimate by 7 cents.

WFC shares were slightly down during pre-market trading hours on Tuesday. The stock has gained a modest 4% from the beginning of this year.

CFO John Shrewsberry said, “Our net charge-off rate remained near historic lows, and we had strong capital returns, including increasing our quarterly common stock dividend by 19% and reducing our common shares outstanding by 9% compared with a year ago, while maintaining a strong capital position.”

Last month, Wells Fargo had announced the appointment of Charles W. Scharf as the new Chief Executive Officer and President, effective October 21. Scharf was previously Chairman and CEO at Bank of New York Mellon.

Meanwhile, rival Citigroup Inc. (NYSE: C) reported a 6% increase in earnings for the third quarter of 2019 helped by the lower effective tax rate and higher revenues despite higher expenses and cost of credit. The results exceeded analysts’ expectations.

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